April 20, 2012 11:46 AM

The Age-Old Problem of Age

Posted by Steven Harper

Although Kelley Drye & Warren recently settled the age discrimination complaint that the EEOC had filed against it on behalf of a 79-year-old former equity partner, the question remains: Can law firms adopt mandatory retirement policies? 

The conventional wisdom is that such policies are a bad idea—and may even constitute unlawful age discrimination. The policy argument is that people live longer these days, that those who are productive should be able to keep working, and that everyone should be compensated according to the value they add.

The legal defense of mandatory retirement policies is that partners are employers and, therefore, outside the law's protections afforded employees. The rebuttal is that most partners in today's big firms have little say over their fate, so should they get whatever benefits the law provides, including compensation based on their contributions.

As framed, the debate is incomplete.

Definitional confusion

Mandatory retirement is a misnomer. The issue isn't whether partners can continue practicing law at their firms. Rather, the question is whether they should remain equity partners in a world where achieving that status is increasingly difficult. In other words, the dispute isn't about a senior attorney's devotion to the practice of law; it's about the money he or she should get paid for doing it.

No one told Eugene D'Ablemont that he couldn't continue working on his client matters. Indeed, he did so for more than a decade after reaching Kelley Drye's equity partner age limit of 70. He simply wanted compensation appropriate for his economic contribution to the firm.

Salary as a "lifetime partner" (plus a bonus) wasn't enough for D'Ablemont, even though Kelley Drye reportedly asserted in response to the original complaint that he billed only between 195 and 324 hours a year during the late 2000s. But he had mustered letters from two clients who said his personal involvement in their affairs over many years meant that his inability to take the lead on future matters "created a rather difficult situation."

Aye, there's the rub.

The problematic dark side

Most big law firms have evolved—or devolved—into short-term, bottom-line businesses. An eat-what-you-kill approach to compensation encourages partners to keep client relationships away from others who might claim billing credit when year-end reviews roll around. Likewise, the lateral hiring frenzy makes such behavior even more important to attorneys who want to preserve their options and demonstrate their dollar value.

As a result, aging partners have no reason to institutionalize clients by nurturing relationships with younger lawyers. For those who have little or no desire to confront either their own mortality or the prospect of life after their big firm careers, the incentives offered by most firms are unambiguous: Keep what you have and try to keep anyone else from claiming any part of it.

Who benefits from this system? Equity partners who have already pulled up the ladder on the next generation by promoting fewer lawyers and making them wait longer.

Who suffers? Young attorneys who want opportunities and training. The system offers no reason for senior lawyers to become mentors, only blockage and the hardening of an aging and myopically self-interested group's economic interests.

What is collateral damage? The firms themselves. The failure of elders to encourage their clients to trust the firm's next generation produces long-term institutional instability.

At the heart of the problem is a short-term, metrics-driven model that fails to guide aging partners to productive lives after the law. Aric Press suggests ways that firms could do better. Meanwhile, the absence of mandatory retirement rules for equity partners will make existing intergenerational tensions worse as they undermine the fabric of many firms.

Again, no one is saying that such elders can't continue practicing for as long as they want. But that doesn't require hanging on to a slice of the equity pie.

As for clients who worry about a "difficult situation" that might result if their long-time counselor will no longer be lead attorney into his or her eighties, consider this: eventually, everyone dies. There's nothing that even the EEOC can do about that.

Steven J. Harper is an adjunct professor at Northwestern University and author. He recently retired as a partner at Kirkland & Ellis, after 30 years in private practice. His blog about the legal profession, The Belly of the Beast, can be found at www.thebellyofthebeast.wordpress.com. A version of the column above was first published on The Belly of the Beast.

 

 

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